Like Father, Like Son? On Intergenerational Income Mobility in Germany

Social inequalities are complex and multidimensional. Opinions on what makes a good life and what is fair vary widely. The same applies to social mobility, which in economic terms usually refers to the relationship between the income of parents and that of their children.

Social inequalities are complex and multidimensional. Opinions on what makes a good life and what is fair vary widely. The same applies to social mobility, which in economic terms usually refers to the relationship between the income of parents and that of their children. The focus is on income because of the considerable influence it exerts on people’s opportunities to develop and to participate in our society. Ultimately, it's about the belief that, ideally, children should be better off than their parents. It is therefore examined what absolute and relative income mobility persist across generations. The results show that in western Germany 63 per cent of sons born between 1955 and 1975 earned a significantly higher wage or salary than their fathers. Those with fathers from the lowest earnings bracket were particularly successful in improving their status. Our analysis focuses on fathers and sons because they still tend to have more continuous employment biographies than mothers and daughters, making a comparative analysis much easier. Eastern Germany was not included in the study due to the fundamental differences in economic conditions before and after the German reunification. Furthermore, the remaining observation period is too short for our purposes. A direct comparison with the US makes clear that Germany has the higher income mobility. This applies to both absolute and relative income mobility. In recent decades, economic growth in Germany has been distributed more widely, so that large sections of the population have been able to share in the country’s rising prosperity. Social advancement is possible in Germany and t oday's adults are better off than their parents.